Publications
Partners
Johannesburg - Perceptions that the global economic cycle appears to be rebounding for now, after more positive economic data from the US, supported global markets on Thursday and the JSE was also marginally higher by mid-morning.
All the local indices were higher, including the beleaguered Gold index, with the exception of the Industrial index which was modestly lower as the big dual-listed shares followed the FTSE index in London lower.
The positive mood on global markets started on Wall Street on reports that activity in the US services sector recovered sharply in September from a six-year low hit in August, following similarly upbeat news from US factories on Monday.
“In light of the recent recovery in Japanese and Chinese surveys the global economic cycle appears to be rebounding for now,” said Chotaro Morita, chief bond strategist at SMBC Nikko Securities.
Asian markets were also higher, but the European markets were pulled down by a drop of more than 6% in the share price of the budget airline easyJet after it warned its profit would fall by more than 25% this year.
By mid-morning on Thursday the All-share index on the JSE was a modest 0.09% higher at 51 904 points, while the Top 40 index traded 0.12% stronger at 45 363 points. The Financial index gained 0.46%, but the Industrial index was 0.28% lower.
The Resources index was at that stage 0.71% higher, with the Gold index trading 1.71% stronger due to bargain hunting after losing over 11% over the previous seven days and more than 26% over the previous 30 days.
The Resources index benefited from more positive sentiment about the global economy, which lifts demand for commodities, as well as the recent oil price rally; however, gains were modest as the positive economic sentiment boosted bets that the US Federal Reserve would raise interest rates in December. Interest rate futures are pricing in a chance of about 60% that the Fed will hike by its December meeting.
These expectations supported the dollar and bond yields reached a four-month high, which could be detrimental in the long run for shares and commodity prices.
The gold price extended losses, hitting a three-and-a-half month low of $1 262.2 per ounce after last standing at $1 267.4.
Aspen [JSE:APN] continues to be one of the busiest shares on the JSE after GlaxoSmithKline sold 28.2 million shares, equal to 6.2% of Aspen’s ordinary share capital, to institutional investors for R300 each or R8.47bn. Aspen’s share price lost 1.31% to trade at R300.51 and is now 15.4% down over the past 30 days before Thursday’s trade.
Steinhoff [JSE:SHF] lost 0.41% to R77.43 and Richemont [JSE:CFR] was 0.85% softer at R83.98. British American Tobacco [JSE:BTI] was 0.27% lower at R852.63, but Naspers [JSE:NPN] gained 0.23% to R2 360.52. The share price increased 2.36% over the previous seven days but is 1.1% lower over the previous 30 days. It traded at an all-time high of R2 530.00 on September 6 this year.
Sasol [JSE:SOL] gained more than 5% over the previous seven days on the back of a rally in the oil price, and by mid-morning on Thursday was 1.32% higher at R386.71. The price is however still more than 21% lower over the past 90 days.
Oil prices dipped on Thursday after Saudi Arabia trimmed the price of its flagship crude to Asia, but were still near more than three-month highs following a drop in US crude inventories. Brent on Thursday traded at $51.90, up 5% so far this week.
BHP Billiton [JSE:BIL], which also has interests in oil and gas production, was 0.2% higher at R210.48. It gained more than 11% over the previous seven days.
Sanlam [JSE:SLM] and Coronation [JSE:CML] were among the busiest shares in the financial section. Both gained more than 2.5% over the previous seven days. Sanlam traded 1.23% higher at R63.13 and Coronation was 1.04% stronger at R72.55. Old Mutual [JSE:OML], which gained more than 4.4% over the past week, gained 0.19% to R36.09.
